Period between signing and closing

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March 22, 2023

by a searcher from University of Applied Sciences in Hamburg, Deutschland

I am currently in LOI negotations and wanted to get some advice or experience what could be a reasonable timeframe between signing and closing for a share deal to agree on in the LOI to set realistic expectations. Target and acquirer are German companies. Deal size about €1.5m, straight forward deal structure: equity + co-investors + bank loan. Thanks for your feedback!

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Reply by a professional
from Villanova University in West Chester, PA, USA
You can have a fixed timeframe for closing or a variable timeframe for closing that is triggered by certain events. If acceptable to the Seller, I would recommend a variable timeframe, i.e. at least X days after the execution of the LOI and within X days after obtain funding. Funding takes time and it's really hard to pinpoint. That generally takes the longest, so you can ask your funding sources timeline recommendations. If there's pushback, you could add that such timeframe won't exceed X days/months after the execution of the LOI or will automatically extend upon the payment of a deposit. There's a bunch of ways to structure it!
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Reply by a searcher
from University of Applied Sciences in Hamburg, Deutschland
Hi Laura, thanks for your feedback. I guess I ll use the variable timeframe.
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